General Motors' U.S. car and truck sales rose 11 percent in March, a smaller increase than the prior two months as it offered fewer rebates and other incentives.
The largest U.S. car company says it sold 206,621 new vehicles last month. Sales were led by small cars and crossovers as people bought higher mileage vehicles in response to rising gasoline prices. The new Chevrolet Cruze small car fueled gains with growth of 80 percent.
GM is the first major car company to report U.S. sales on Friday.
The GM increase over March of 2010 was far below the 17 percent sales jump expected by industry analysts for overall U.S. sales.
The company surprised the rest of the industry when it raised discounts by about $400 per vehicle in January and extended them into February. But Vice President of U.S. Sales Don Johnson says the company cut incentives by $600 to $800 in March.
GM last month sold just over 18,000 Cruzes, the company's first well-received small car in years. By contrast, it sold just over 10,000 Chevrolet Cobalts, the Cruze's lackluster predecessor, in March of last year.
GM's midsize crossover vehicles, the Chevrolet Equinox and GMC Terrain, also continued to be hot sellers, with the Equinox up 17 percent and Terrain up 29 percent. Crossovers look like truck-based SUVs. But the get better mileage and are more maneuverable because they are built on car underpinnings.
Sales of full-sized pickups remained decent for the month. The Chevrolet Silverado rose 9 percent and the GMC Sierra climbed 17 percent.
The automotive website Edmunds.com said that GM cut its incentives by $643 from February to March. Industry incentives dropped $220 per vehicle to an average of $2,346 as people bought more small cars in March, Edmunds said. Small cars generally have lower sticker prices and therefore fewer incentives.
The February to March decline was the biggest drop since Edmunds started tracking incentives in 2002, the company said.
GM's January and February incentives increase boosted sales, including a 23-percent gain in January and 49 percent in February.
"The hefty — and costly — incentives from GM in the first two months of the year fell back to earth in March, and that translated into lackluster retail sales," Edmunds Director of Industry Analysis Jessica Caldwell said in a statement.
But Johnson said GM expected slower sales in March as it pulled back on discounts.
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